I think you're talking about Ehrgeiz, that had a handful of FF characters but wasn't a Final Fantasy fighting game, game was good though, kinda wish I still had my copy and a working PS1...
Dissidia is an interesting game...wish i could understand japanese though....i downloaded it and its a great game has Squall, Tidus, and Cloud, lots of action and yes like Siccx said nothing like Ehrgeiz...i am looking for that game myself....